HI SCR38

Requests the Public Utilities Commission to establish and accelerate implementation of a cost savings incentive mechanism to motivate electric utilities to reduce energy costs.

Identifies that electricity rates in Hawaii are at record levels due to high petroleum costs for electric generation and rising utility operating expenses while sales have declined.

Notes that current regulatory mechanisms like the energy cost adjustment clause provide no profit incentive for utilities to reduce energy costs or seek lower-cost alternatives.

Finds that current ratemaking applies a single authorized rate of return to all utility plant investments without differentiating between modernization investments (which should be encouraged) and investments in old fossil generation (which should be discouraged).

Directs that the Public Utilities Commission implement economic incentives to encourage cost reduction, increased renewable energy utilization, retirement of fossil generation facilities, and modernization of electrical grids.